28JAN09:
Q1-09 DOW: 8900
Q2-09 DOW: 7250
Q3-09 DOW: 5810
Q4-09 DOW: 3960
CITI NATIONALIZED
OBAMA GETS SICK 27AUG09:
Mini Crash 21SEP09 Predicted correctly:
Bailout=Bonuses
Demise of Bear Stearns
Demise of Lehman Bros.
Demise of AIG
Subprime would cause problems
Date of 2007 crash
CRAs were to blame
G20 riots were a party
Northern Rock run
Northern Rock Nationalization
HBOS and RBS demise
UBS really was Useless
I have recently taken up the past time of Rambling. My newsletters are renowned for rambling, but this is not what I mean. Rambling is a UK expression for hiking (it implies a slow leisurely walk as opposed to a hike with all the requisite kit) and my love of water has inspired me to hike along the beautiful coast of the UK.
Much of the UK's coast is the product of sea erosion. Like the markets, the sea is very powerful. Although the regulators have put in barriers to help control it, like the Thames barrier in London, many of the old regulations have been cast aside and the water is being allowed to do what it does best. Make things wet.
Take this photo of Porlock Vale on the north coast of Somerset over looking one of the most violent tidal rivers in the world - the Severn. The local regulators have tried to build a defence to protect the farm land and the villages in the vale. But it doesn't bother any more.
Take Investment Banks, Wholesale Banks, Debt buckets like Freddie and Fannie - they are all being given sandbags and piles of cash or King Knut promises by the regulators to help stop them being flooded. Well there will be a time when the market forces will be too strong and they will drown. When? Who knows. They may even escape, but one is sure that when the markets turn, no amount of regulation will save those in wrong place at the wrong time.
Something I have always feared is bankruptcy and nuclear war. I read today that personal bankruptcy is increasing rapidly and the cold war is back in fashion.
Now where did I leave my hiking boots ...
BOND FUND TITAN SEEKS $5BN FOR MORTGAGE-BACKED DEBTS
Pimco, the manager of the world's largest bond fund, is looking to raise a $5bn (£2.7bn) fund to buy up tranches of depressed mortgage-backed debt.
The group, which is part of German financial conglomerate Allianz, is the latest financial investor to attempt to profit from buying mortgage-backed debt that has fallen in value as a result of the sub-prime mortgage crisis.
The California-based fund manager is understood to be touring investors to gain commitments for the new fund, which is to be called the Distressed Senior Credit Opportunities Fund. It would invest in so-called senior and super-senior securities backed by commercial and residential mortgages.
Fintag says We all want to buy distress. Shame you cannot package up mental illness and make a turn on it. [Editor: Uh?]
FIRE SALE: CALIFORNIA HOME PRICES NOW 40% BELOW YEAR-AGO LEVELS
The median sales price of California homes sold in July was 40.3% below year-ago levels as bargain-hunters snapped up distressed housing in large numbers, skewing the state's housing market toward cheaper houses, the California Association of Realtors reports.
Median sales prices in the state -- which peaked at just under $600,000 late last summer -- fell from $587,560 in July 2007 to $350,760 in July 2008, a staggering decline that translates into prices falling by $4,500 per week.
Fintag says More distress.
This ....
...was caused by this innocuous teen drama...
In the UK, this massive write off ... times says " Taylor Wimpey reveals £1.5bn property hit " ..will give the internal commercial property valuation teams at the banks nightmares. How much land does HBOS own for example?
For more than a decade, Marcus Wareing was Gordon Ramsay's publicity-shy "shadow", toiling over the stove for up to 18 hours a day to meet the exacting kitchen standards set by his motormouth boss.
Today, in a decisive shift of reputations, Wareing will be shown to have spectacularly outshone his best man and former mentor: his Knightsbridge establishment, Petrus, has been named best restaurant in the capital.
For Wareing, publication of Harden's 2009 London Restaurants - based on the reports of 8,000 diners - is a sweet moment in his simmering professional rivalry with Ramsay, whose company he will leave next month after a long and messy split.
Fintag says As a lover of lunches and a slave to the gym and my hiking shoes, the past time of eating well is becoming more difficult. Gordon Ramsey is a brand way past its best by date. His food has been below par for years but because he tells us how good it is, we believe him. Thankfully a recession will soon remove his restaurants and other pretenders from the London streets very soon.
London has the best restaurants in the world by far. But it needs to let those wannabe cities like New York catch up. I mean have you ever eaten at this New York diner where the lines are 3 miles long? No wonder Credit Suisse bankers look so unwell.
A San Francisco-based hedge fund manager is being sent to the clink for five days for illegally trimming trees at a state park adjacent to his vacation home.
Last week, a jury found Derek Webb guilty of vandalism, and yesterday the judge ordered Webb to perform 50 hours of community service and to spend five days in jail, according to The Press Democrat.
The tree trimming incident occurred last October. A state parks official caught Webb, chainsaw in hand, hacking away at branches on the south side of Van Damme State Park. Webb owns a sprawling vacation home right next door to the park. At the time, Webb said he was trying to help maintain a heavily used trail.
Fintag says The threat of a new Cold War seems to pale into insignificance when I read stories like this.
Microsoft released a web browser on Wednesday that includes a feature that could affect the advertising model of internet rivals such as Google.
The Internet Explorer 8 browser's InPrivate setting lets users access websites without disclosing their browsing habits, which websites need to be able to do to deliver targeted advertising. This is a business Google has just moved into through its acquisition of DoubleClick.
The feature has been dubbed “por* mode” because it also hides the browsing history from other people using the same computer. While other browsers have similar options, it is in a much more prominent position on Microsoft's product.
Fintag says ...and very good for insider trading because you will be able to leave comments on message boards without your IP address being traced.
I guess many websites will just not let you read them, if you use IE8. FiNTAG gets great joy at allowing you to see who is reading this drivel. But alas, this may become another fun aspect of our lives taken away. Enjoy it will you can.
Two big hedge funds, run by billionaires Steven Cohen and David Shaw, tightened their grip on Orient-Express Hotels yesterday in an effort to get the Bermuda-based owner of the famous '21' Club to eventually put itself up for sale.
The two funds, CR Intrinsic and D.E. Shaw, which own a combined 14.3 percent of Orient's shares, have called for a special meeting so shareholders can vote to collapse the company's dual-class ownership structure, which is standing in the way of a possible takeover.
Fintag says Today's newsletter gets even more bizarre.
Martin Asset Management, LLC ( MAM ) a Los Angeles based boutique investment firm is offering its new "Hedge Plus" separate managed account product with all the features one would usually find in a hedge fund strategy, such as leverage, short positions, commodities, currencies, fixed income and real estate holdings. MAM exclusively uses Exchange Traded Funds ( ETFs ) to achieve its asset allocation. "We use leveraged, inversely correlated ETFs as well as country specific and sector ETFs to achieve a very well diversified Global portfolio strategy. ETFs allow us to quickly move in and out of already diversified baskets of asset classes without the liquidity issue. Furthermore, we have no lockups and no management fees. We only get paid if we are able to perform and that is a win-win situation which no other asset management firm is currently offering", says Francisco Martin, Chief Investment Officer and Founder of Martin Asset Management.
This could be truly a new trend in wealth management. In a world where clients are extremely sophisticated this seems to be the only fee strategy that will resonate well and compensate managers for producing real returns.
Fintag says I thought I had better review a hedge fund story even if I have reviewed it before.
The eurozone mortgage-backed bond market and the banks which rely on it are braced for some potentially harsh medicine following increasing hints from governors of the European Central Bank about some form of crackdown on banks' use of its liquidity facilities.
The use of mortgage-backed debt and other asset-backed securities (ABS) as collateral for central bank funding in Europe has increased significantly since the credit crunch. Strong signs that the ECB is now about to take action over this have the potential to unsettle not just securitisation markets, but other areas too.
Fintag says What a surprise. By offering cheap cash for crap collateral, the ECB has implicitly helped put a nice price on the crap. What did I say about trying to hold back the tides? Sometimes you have to let things die so resources can be utilised elsewhere and equilibrium restored.
The fates of Fannie Mae and Freddie Mac reportedly hang over meetings of the Federal Reserve. As the government considers its options for the two mortgage giants–nationalization, restructuring or just plain nothing–it is becoming clear that telling shareholders to jump in a lake is a bigger problem than it first seemed: big holders of Fannie and Freddie securities range from banks to foreign governments, and wiping out the value of their investments risks deepening the stress on the wider financial-services industry.
The Financial Times points out today that regional banks hold $36 billion of the preferred stock in Fannie Mae and Freddie Mac. Dealbreaker's John Carney noted that the Fed is pressuring the Treasury not to wipe out shareholders because it could hurt regional banks that already are under pressure.
Fintag says And to prove the point once more, here we have a classic case of market distortion. Let them collapse or be nationalized. Somewhere in the middle is causing massive uncertainty to the USA.
8 comments
anonymous said ...
You should also take up the pastime of spelling and grammar. How can you tell I'm a bean-counting pedant who needs to get a life (this is a rhetorical question but does not preclude further opprobrium).
28 Aug 08 - 08:37 gmt
anonymous said ...
I'm the same, but have reached a happy equilibrium where I no longer care how Fin spells as it's not the point of the blog. I'm more concerned about his hiking diet - it looks like you are barbecuing flattened dog meat!
28 Aug 08 - 08:44 gmt
Finbar said ...
My grammar and spelling is shocking. As my old boss used to say, spelling is for losers. My excuse is its 6 in the morning when I write this so I apologise. Treat it as a stream of drivel.
28 Aug 08 - 08:47 gmt
ben w said ...
If you love your rambling get yourself down to the beautiful beaches and countryside of the Gower. Don't bring Janet Street Porter with you though
28 Aug 08 - 09:13 gmt
Fo' real said ...
Fin you are right, grammar is for losers. Formatting is for consultants. Insight is for hedgies. By the way some guys in the US have launched a Facebook ripoff for buyside analysts. The website is sumzero.com. They only launched recently so its still subscale. Haven't checked it myself as the registration process is too long, but I thought some readers may be keen.
28 Aug 08 - 09:14 gmt
anonymous said ...
how does one join?
28 Aug 08 - 13:53 gmt
anon said ...
hearing Farallon are struggling, can anybody confirm?
28 Aug 08 - 16:30 gmt
Dan said ...
Wholly concur about the "let it die and begin new life" sentiment. Propping up these failed individuals is awful. I still can't get over that crap woman whose CNBC segment you showed two days back.
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